U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Bono Project Edge Project Clayton Capital investment $160,000 $175,000 $200,000 Annual net income: Year 1 14,000 18,000 27,000 2 14,000 17,000 23,000 3 14,000 16,000 21,000 4 14,000 12,000 13,000 5 14,000 9,000 12,000 Total $ 70,000 $ 72,000 $ 96,000 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Instructions: (a) Compute the cash payback period for each project. (Round to two decimals.) a. (b) Compute the net present value for each project. (Round to nearest dollar.) a. (c) Compute the annual rate of return for each project. (Round to two decimals.) a. (d) Rank the projects on each of the foregoing bases. Which project do you recommend? a.

John novosel was employed by nationwide insurance company for fifteen years. novosel had been a model employee and, at the time of discharge, was a district claims manager and a candidate for the position of division claims manager. during novosel's fifteenth year of employment, nationwide circulated a memorandum requesting the participation of all employees in an effort to lobby the pennsylvania state legislature for the passage of a certain bill before the body. novosel, who had privately indicated his disagreement with nationwide's political views, refused to lend his support to the lobby, and his employment with nationwide was terminated. novosel brought two separate claims against nationwide, arguing, first, that his discharge for refusing to lobby the state legislature on behalf of nationwide constituted the tort of wrongful discharge in that it was arbitrary, malicious, and contrary to public policy. novosel also contended that nationwide breached an implied contract guaranteeing continued employment so long as his job performance was satisfactory. what decision as to each claim?

Jackson is preparing for his hearing before the federal communications commission (fcc) involving a complaint that was filed against him by the fcc regarding the interruption of radio frequency. the order to "cease and desist" using the radio frequency has had a detrimental impact on his business. once the administrative law judge prepares his or her initial order, jackson has no further options. no, jackson can request that the matter be reviewed by an agency board or commission. yes, once the initial order is presented, it's only a matter of time before the order becomes final.

Calculate the cost of each capital component—in other words, the after-tax cost of debt, the cost of preferred stock (including flotation costs), and the cost of equity (ignoring flotation costs). use both the capm method and the dividend growth approach to find the cost of equity. calculate the cost of new stock using the dividend growth approach. what is the cost of new common stock based on the capm? (hint: find the difference between re and rs as determined by the dividend growth approach and then add that difference to the capm value for rs.)assuming that gao will not issue new equity and will continue to use the same target capital structure, what is the company’s wacc? e. suppose gao is evaluating three projects with the following characteristics. each project has a cost of $1 million. they will all be financed using the target mix of long-term debt, preferred stock, and common equity. the cost of the common equity for each project should be based on the beta estimated for the project. all equity will come from reinvested earnings. equity invested in project a would have a beta of 0.5 and an expected return of 9.0%.equity invested in project b would have a beta of 1.0 and an expected return of 10.0%.equity invested in project c would have a beta of 2.0 and an expected return of 11.0%.analyze the company’s situation, and explain why each project should be accepted or rejected g